Auto Industry Caught Up In The Silly Season in Michigan

As Election day draws near, the stumping and political ads grow fiercer in Michigan. And so much of what I hear is utter crap.

The high stakes in Michigan next week are the Governor’s race and one of the two U.S. Senate seats. The incumbent Governor, Democrat Jennifer Granholm, is fending off a challenge by Dick DeVos, whose family founded…Amway. U.S. Senator Debbie Stabenow is being challenged by Republican Mike Bouchard.

DeVos has been hammering Granholm about the loss of jobs in Michigan and the unemployment rate. The unemployment rate has been caused primarily by the downsizing and restructuring of the Big Three automakers, though the state has also lost a number of non-automotive manufacturing jobs as well. DeVos has criticizing Granholm about not doing a good enough job of replacing those lost manufacturng jobs.

Manufacturing jobs? How many companies are looking to locate new manufacturing jobs in the U.S.? Ford Motor Co. chairman Bill Ford once told me that he is not trying to decide between Michigan and Ohio for a new plant, but the U.S. versus Mexico, or the U.S. versus China. Auto parts company Delphi had long ago started to downsize its capacity in the U.S. in favor of new plants in the Far East. The list goes on.

I admit I haven’t followed the campaign rhetoric on a granular level. I hav a weak stomach. But I did try to endure the televised debates. No one really addressed what the heck the Governor, Demnocrat or Republican, could do to keep the auto companies and parts companies from downsizing to get their capacity and employee number in line with their falling market share. GM, Ford and Chrysler have targeted over 100,000 jobs for elimination in the last five years. And thats just the Big Three. Auto parts companies are having to downsize as well to match the declining sales and market share of the Big Three.

What can the Governor do about this? Nada.

DeVos is running a TV ad that shows a manufacturing facility his company, Windquest, put up in Michigan that makes closet organizing systems. Manufacturing jobs. Get it. DeVos put new, non-auto, manufacturing jobs in Michigan. He’s a hero. The punch-line, of course, is that DeVos was able to order up these job like a ham sandwich because he controlled the company. DeVos has long had political ambition in Michigan. It’s not a reach to submit that locating those jobs in Michigan was part of DeVos’s alchemy for making a run at the Governor’s mansion. From a sheer business standpoint, without the political factor, most executives I know wouldn’t be anxious to locate manufacturing jobs in Michigan because of the much higher costs of labor and health benefits, versus Mexico, South America or Asia.

The manufacturing jobs evaporating in Michigan are not coming back. To pretend or assert that they could in the silly season of campaigning is an awful thing to do to people who are trying to figure out the next chapter in their lives.

That brings me to soundbites I heard this morning from Arizona Senator John McCain, stumping yesterday in Michigan for Bouchard. McCain blathered that he couldn’t understand why Michigan was losing auto jobs to states like Alabama when there were so many experienced auto workers in Bouchard’s state. Granholm, he asserted, doesn’t know how to attract new auto jobs to Michigan. Vote for Mike! He knows!

[Throat clear] Senator…I know there aren’t any auto plants in Arizona. But there is a little oprganization you may have heard about called the United Auto Workers. No Asian or European auto company is going to open a plant in Michigan that isn’t unionized. The Mercedes, Honda and Hyundai plants in Alabama, the Toyota plants in Kentucky and Texas and Indiana, etc. want no part of a workforce organized by the UAW. They don’t want to submit themselves to the UAW pay-scale, work rules or benefit demands. That said, those auto jobs in the South that aren’t unionized have brought a lot of new and valuable jobs to down-and-out areas. And the workers I have talked with down there are quite happy about their lot.

That’s why Michigan wasn’t a factor in attracting those plants. Nothing Mike Bouchard is going to be able to do about that either.

Michigan is in the midst of a painful transition from a manufacturing heavy economy to one led by intellectual capital [Toyota, Hyundai, Kia, Nissan and Google all have growing centers of engineering, design and sales operations in Michigan], entreprenurial service [franchise and independent businesses to cater to growing class of non auto educated white collar jobs] and start-up tech and energy firms [alternative energy, software, etc].

Ads and rhetoric that dwell on the lost manufacturing jobs are doing a great disservice to the electoral and political process. But we are seeing so much awful, junior high school level ad messaging and speechifying this season, what’s happening in Michigan is hardly the worst stuff the country is seeing.

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